As we wrote about last month, on May 21, 2018, the Supreme Court rendered its decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1632 (2018), rejecting perhaps the largest remaining obstacles to the enforcement of class action waivers in arbitration agreements in the employment context. The Court concluded that the class action waivers did not violate the National Labor Relations Act (“NLRA”). Although the Court’s opinion also seemed dispositive of whether such agreements could be avoided under the Fair Labor Standards Act (“FLSA”), at least one claimant tried to continue to litigate the issue, which was disposed of last week in Gaffers v. Kelly Servs., Inc., No. 16-2210 (6th Cir. 2018). And now the Sixth Circuit has addressed whether Epic Systems would apply to arbitration agreements with putative independent contractors who contended that they should have been treated as employees.
On May 21, 2018, the United States Supreme Court issued its decision in Epic Systems Corp. v. Lewis, holding that the National Labor Relations Act (“NLRA”) does not prohibit the use of arbitration agreements with class/collective action waivers covered by the Federal Arbitration Act (“FAA”). The Sixth Circuit has now concluded in Gaffers v. Kelly Services, Inc. that the Fair Labor Standards Act (“FLSA”), like the NLRA, does not bar the use of arbitration agreements with class/collective action waivers.
In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (June 17, 2017), the U.S. Supreme Court established limitations on personal jurisdiction over non-resident defendants in “mass actions,” a litigation strategy often utilized by plaintiffs’ class action attorneys to sue corporations in plaintiff-friendly jurisdictions that have little to no connection with the underlying dispute. The Supreme Court determined that the requisite connection between the corporate defendant and the litigation forum must be based on more than a combination of the company’s connections with the state and the similarity of the claims of the resident plaintiffs and the non-resident claimants. The ruling directed the dismissal of 592 non-California claims from 33 other states. As a result, the ruling supports the view that plaintiffs cannot simply “forum shop” in large class and collective actions and instead must sue where the corporate defendant has significant contacts for purposes of general jurisdiction or limit the class definition to residents of the state where the lawsuit is filed.
On April 23, 2018, the U.S. District Court for the Northern District of Illinois in Ratliff v. Celadon Trucking Servs., 1:17-cv-07163, dismissed a putative class action lawsuit alleging a violation of the pre-adverse action notice requirements in section 1681b(b)(3) of the Fair Credit Reporting Act (“FCRA”). Ratliff is significant in the body of background check precedent because it is a part of an emerging trend of § 1681b(b)(3) claims (as opposed to the more commonly challenged § 1681b(b)(2)Disclosure claims) challenged and dismissed for lack of Article III standing.
In the opinion, Judge Manish S. Shah found plaintiff Ratliff could not show that he suffered an injury-in-fact after defendant Celadon allegedly did not properly provide him with an FCRA mandated notice before declining his employment due to the results of his criminal background check.
When a party receives an adverse order on a motion for class certification, whether the court of appeals grants permission to appeal under Rule 23(f) can be a crucial turning point in the case. If the appellate court will not hear this interlocutory appeal, the only way to obtain review of that decision is to take the case through trial, to a final judgment. But, due to the high stakes and large costs involved, few class actions are tried and cases often settle after the class certification order is issued by the trial court.
On December 21, 2017, the U.S. District Court for the Eastern District of Pennsylvania in Moore v. Rite Aid Headquarters Corp., 2:13-cv-01515, dismissed a class action lawsuit alleging a violation of the pre-adverse action notice requirements in section 1681b(b)(3) of the Fair Credit Reporting Act (“FCRA”). Moore is significant in the body of criminal background check precedent because it is a post-Spokeo ruling dismissing a pre-adverse action notice claim (as opposed to a 1681b(b)(2) Disclosure claim) on standing grounds after the parties participated in discovery and developed a factual record.
On December 14, 2017, in a 3-2 decision along party lines, the National Labor Relations Board (the “Board”) issued a decision in The Boeing Company, 365 NLRB No. 154 (2017) case. This is a significant and long-awaited victory for employers grappling with unfair labor practice charges stemming from facially neutral workplace rules and signals the Board’s intent to retreat from regulating non-union activity. Specifically, Boeing rescinds the onerous workplace rule standard in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004) in favor of a new, more rational test.
The day employers have been waiting for, has finally arrived. The government has indefinitely stayed the requirement that companies begin reporting “Component 2” wage data in their EEO-1 Reports. Companies around the country are breathing a collective sigh of relief.
On August 3, 2017, the U.S. Senate confirmed Marvin Kaplan, a former Occupational Safety and Health Review Commission attorney, to fill one of the two vacant seats on the National Labor Relations Board. Kaplan’s confirmation moves the Board one step closer to a Republican majority. Kaplan was confirmed on a 50-48 party-line vote by the Republican-controlled Senate. Kaplan joins NLRB Board Chairman Philip Miscimarra on the Republican side of the NLRB. Mark Gaston Pearce and Lauren McFerran are the Democrat Board members.